22 F.4th 1014
D.C. Cir.2022Background
- Mandy Mobley Li filed a Form 211 with the IRS Whistleblower Office (WBO) alleging tax violations by a third party and seeking a monetary whistleblower award under 26 U.S.C. § 7623(b).
- The WBO reviewed Li’s submission and rejected it as too vague and speculative, did not refer the matter to an IRS examiner, and sent Li a letter advising she could appeal to the U.S. Tax Court.
- Li petitioned the Tax Court; the Commissioner moved for summary judgment and the Tax Court, relying on its precedents (Cooper and Lacey), granted summary judgment for the IRS, finding no WBO abuse of discretion.
- Li’s motion for reconsideration was denied and she appealed to the D.C. Circuit; the Court appointed amicus to address jurisdiction.
- The D.C. Circuit held that the Tax Court lacked subject-matter jurisdiction over WBO threshold rejections under § 7623(b)(4) because no IRS administrative or judicial action was taken and thus no "determination regarding an award" under subsections (b)(1)–(3) occurred.
- The D.C. Circuit dismissed the appeal for lack of jurisdiction and remanded with instructions that the Tax Court dismiss on jurisdictional grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Tax Court has jurisdiction under 26 U.S.C. § 7623(b)(4) to review a WBO’s threshold rejection of a Form 211 | Li: WBO rejection is a "determination regarding an award" and is reviewable in Tax Court (per Cooper and Lacey) | IRS: A threshold rejection is not an award determination because IRS did not proceed with administrative or judicial action based on the information | Held: No jurisdiction — a rejection without IRS action is not a § 7623(b)(4) award determination |
| Whether prior decisions and statements (e.g., Myers) compel a different result | Li: Tax Court precedent and denial letters suffice as determinations | IRS: Myers’ language does not control the present question about whether a rejection implies IRS action and award determination | Held: Myers’ remark was not dispositive here; Cooper and Lacey were wrongly decided as to this jurisdictional point |
Key Cases Cited
- Bender v. Williamsport Area Sch. Dist., 475 U.S. 534 (1986) (appellate jurisdiction depends on lower court’s subject-matter jurisdiction)
- United States v. Corrick, 298 U.S. 435 (1936) (appellate courts may correct lower courts’ jurisdictional errors)
- Henderson ex rel. Henderson v. Shinseki, 562 U.S. 428 (2011) (courts must address jurisdictional defects even if parties do not raise them)
- Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) (parties’ actions cannot confer subject-matter jurisdiction)
- Myers v. Comm’r, 928 F.3d 1025 (D.C. Cir. 2019) (addressed sufficiency of WBO denial letters but did not decide whether a threshold rejection is a § 7623(b)(4) award determination)